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Zanifu Secures $11.2 Million to Expand Inventory Financing Services in Kenya

최종 수정일: 2023년 8월 23일

August 21st, 2023

Kenyan fintech company Zanifu, which specializes in providing inventory financing solutions to micro, small, and medium-sized enterprises (MSMEs), has successfully raised $11.2 million in debt-equity funding through a pre-Series A funding round. The investment was led by Beyond Capital Ventures and Variant Investments, and also saw participation from Founders Factory Africa, AAIC Investment, Google Black Founders Fund, and existing investor Launch Africa. This funding round brings Zanifu's total debt-equity funding raised to $12.7 million.

Zanifu's core offering involves extending inventory credit to retailers. With this new funding injection, the company intends to broaden its solution to include distributors as well. CEO and Co-founder of Zanifu, Steve Biko, explained that this expansion aims to address the financing needs of distributors who often face difficulties accessing credit from formal financial institutions due to a lack of structured financial records and collateral assets. Zanifu leverages data collected from businesses and their suppliers to assess creditworthiness, thereby mitigating risk by directly disbursing funds to suppliers.

"In our initial product, we exclusively provided loans to retailers to aid their business expansion. However, we discovered that distributors face similar challenges," stated Biko.

The stock financing offering varies based on the size of the business. Distributors can access credit of up to $10,000, while retailers receive goods valued between $200 and $500. Zanifu reports that it has already extended credit to 13,000 micro-businesses and, following its expansion efforts, has catered to 500 distributors as part of its growing customer base.

A monthly interest rate of 5% to 6% is applied, and the company boasts an impressive 99.2% repayment rate. This success can be attributed to Zanifu's evolving underwriting algorithm, which has continually improved over time.

Customers utilize an Android application to determine their credit limits and place orders. Zanifu has seamlessly integrated multiple payment channels into the app to facilitate prompt repayments. Additionally, the fintech company enables retailers to pay for stock acquired from distributors not directly included in its database.

"We found out that most of these retailers, especially in this market, have multiple distributors. And we increased their limits and allowed them to pay any of their distributors," Biko explained. He added that Zanifu is in the process of creating a platform for distributors to update their stock keeping units.

With the newly acquired funding, the startup's focus is on scaling its operations within Kenya, deviating from its previous plan to expand into markets such as Ghana and Uganda. These are also regions where raising capital for the operations and growth of small businesses remains a challenge. Across Africa, small enterprises play a pivotal role in the economy, accounting for almost 90% of businesses and significantly contributing to job creation. The financing gap for MSMEs in Kenya alone is estimated at $19 billion.

Pezesha and Solv, backed by Standard Chartered Ventures, are among the companies addressing the credit needs of these enterprises in Kenya.

"We have decided to go deep in Kenya. We are focusing on serving more micro-SMEs and also getting more distributors into our fold, and ensuring the capital we are dispersing is actually generating returns for these businesses and helping them grow. So that’s really how we’re looking at it for now. We will go to other markets once we get to profitability," said Biko, who co-founded Zanifu alongside Sebastian Mithika.

As a Central Bank of Kenya-licensed fintech, Zanifu has plans to introduce additional financial services, including insurance, and to develop tools that assist businesses in inventory management and bookkeeping.

Source: TechCrunch

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